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Senex, owned by Hancock Energy and South Korea’s POSCO International, said the Albanese government’s proposed gas market reforms would destroy the long-term price signals needed to justify new gas developments. Instead, they leave domestic producers selling gas to LNG exporters, who would then meet domestic supply obligations. The company supplies about 10 per cent of east coast gas demand but exports no liquefied natural gas.

Labor is preparing the biggest intervention in Australia’s east coast gas market since the advent of LNG exports by forcing exporters to reserve up to 20 per cent of exportable gas volumes for domestic customers. The government argues the reforms are needed to head off forecast gas shortages later this decade and ensure Australian manufacturers have access to affordable supplies. Senex argues the opposite will occur: by forcing exporters to sell more gas domestically, the policy will crush prices, choke off investment in new supply and ultimately leave LNG exporters, rather than domestic producers, supplying much of the east coast.

Senex chief executive Darren Stevenson described the proposal as an existential threat, warning it risked destroying a business model that had underpinned more than $1bn of investment in regional Queensland.

“This is an existential issue for domestic gas producers. If you destroy the price signal, you destroy investment, and if you destroy investment you won’t see new developments in regional Australia,” Mr Stevenson said.

Unlike LNG exporters, Senex relies on long-term contracts with manufacturers and electricity generators to underpin investments that typically take 10 to 15 years to recover. Mr Stevenson said the proposed wholesale market and “modest oversupply” provisions would destroy those investment signals, making it impossible to sanction new developments.

“Wholesale and modest oversupply just destroy the price signal,” he said.

The chief executive said the consequences would extend well beyond gas producers, threatening jobs and investment across regional Australia where new developments would no longer stack up economically.

The warning marks a significant escalation in industry opposition to the reforms because it comes from a company whose entire business is built around supplying Australian customers, rather than an LNG exporter with a direct commercial interest in opposing the policy. Manufacturing groups have backed the proposal, arguing greater domestic supply is needed to lower energy costs, while gas producers have warned it risks undermining investment.

Mr Stevenson said the market was already responding to the government’s proposed intervention, with industrial customers delaying long-term gas contracts because they expected cheaper government-directed gas would become available.

“Customers will not contract with us,” he said. “They think the government is getting into the market and it might be a materially different price.”

Without those long-term contracts, domestic producers would struggle to secure financing for new developments, eventually reducing the amount of Australian-owned gas available to local users, he said.

Unable to secure traditional customers, Mr Stevenson said discussions with government officials suggested Canberra envisaged a future where companies such as Senex would instead sell gas to LNG exporters, which would then fulfil domestic supply obligations.

“This is clearly not delivering on the intent of the policy,” Senex said in its submission to the government’s gas market review. “Surely the intent of the policy is not to push domestic gas producers out of the domestic market and instead position us as suppliers of gas to the export projects.”

Senex is the latest company to join a growing industry campaign against Labor’s proposed reservation scheme. LNG exporters, including Woodside and Santos, have warned the reforms threaten Australia’s reputation as a stable destination for investment, while SGH chief executive Ryan Stokes this week urged the government to rethink key elements of the proposal. Mr Stokes said excessive intervention risked discouraging investment needed to address looming supply shortfalls and only multinational manufacturers really stand to benefit.

Australia’s gas industry is lobbying the government to amend the framework before legislation is introduced, arguing the current design risks solving one problem by creating another.

Rather than intervening in existing production, Senex urged the government to adopt Queensland’s Australian Market Supply Condition nationally. Under that model, producers know before making an investment decision that new gas acreage must supply the domestic market, providing certainty for investors while guaranteeing additional supplies for Australian customers.

“We’ve started investing nearly $1bn under a model with 100 per cent domestic reservation,” Mr Stevenson said. “It’s quite frustrating that something that’s actually a proven success in bringing more supply to the market is being ignored.”

The company also challenged the government’s reliance on a headline 20 per cent reservation figure, arguing it overstated the size of the east coast supply gap and encouraged unnecessary intervention in a functioning market. Instead, it said governments should focus on encouraging new gas developments in Queensland, NSW and Victoria, where significant undeveloped reserves remain.